As part of the Vilfredo Pareto Research Seminar series, the International Economics Department at the Graduate Institute is pleased to invite you to a public talk given by Gianluca Benigno, Assistant Vice President and Function Head, International Research Function, at Federal Reserve Bank of New York.
He will present his paper The Global Financial Resource Curse, coauthored with Luca Fornaro and Martin Wolf.
Abstract: Since the late 1990s, the United States has received large capital flows from developing countries - a phenomenon known as the global saving glut - and experienced a productivity growth slowdown. Motivated by these facts, we provide a model connecting international financial integration and global productivity growth. The key feature is that the tradable sector is the engine of growth of the economy. Capital flows from developing countries to the United States boost demand for U.S. non-tradable goods, inducing a reallocation of U.S. economic activity from the tradable sector to the non-tradable one. In turn, lower profits in the tradable sector lead firms to cut back investment in innovation. Since innovation in the United States determines the evolution of the world technological frontier, the result is a drop in global productivity growth. This effect, which we dub the global financial resource curse, can help explain why the global saving glut has been accompanied by a slowdown in investment and growth.
About the author
Gianluca Benigno gained his PhD in International Macroeconomics from the University of California, Berkeley. He has published extensively on exchange rate economics, international monetary policy cooperation, monetary, macroprudential and fiscal policies, and more recently on secular stagnation. He is currently on leave from the department of Economics at the London School of Economics. Before joining the London School of Economics, Benigno worked at the Bank of England from 2000 to 2002. He has then held several consulting positions at Bank of England, IMF, and the Inter-American Development Bank. He visited the Bank of England as a Houblon-Norman-George Fellow, Federal Reserve Bank of New York as a senior economist in 2007-2008 and the European Central Bank in April and May 2013 as a W. Duisenberg fellow.